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Big supermarket suppliers, such as pig meat specialist Cranswick (CWK), are used to seeing their margins squeezed. The early months of last year were particularly tough, as it found raw material price increases could not be passed on to consumers. So latest profits are likely to show a fall from a record £47.1 million to £42.8 million. But dividends continue to grow and this year should see a resumption of profits growth, with analysts forecasting £50 million next year. The shares have been a seesaw performer in the past year. Tipped at 835p, they peaked at 842p then drifted right back to 558p before hitting a strong recovery road. They offer a prospective yield of 4%. http://www.iii.co.uk/articles/33487/shares-buy-hold-and-sell
Cranswick: Investec lifts target to 870p and remains a buyer; Peel Hunt ups target from 750p to 800p, hold rating kept.
Britain has swapped beef for pork, causing sales of the white meat to jump, according to Cranswick. The company, the largest British-owned pork processor, saw its shares increase 1.45% after it released an upbeat trading statement.Sales in the final three months of 2011 were up 10% on the previous year, marginally stronger than the increase in the overall British pork market, which increased by 9%. Bernard Hoggarth, chief executive, said that pork shoulder and rolled joints had sold particularly well, helped by being championed by celebrity chef Jamie Oliver as an ideal meat for consumers looking to cut down their food bills, The Telegraph says.
Financial position Following the expected seasonal increase in working capital, the substantial uplift in sales and on-going capital expenditure, net debt increased from £48 million to £59 million during the quarter. The operating cash outflow in the period was in line with last year. The Group is in a strong financial position, with committed, unsecured facilities of £100 million which provide generous headroom going forward. Outlook The business has a well invested asset base, loyal and skilled teams, a great range of products and a strong financial position. Good progress has been made following the challenges of the first half and the Board looks forward positively to the rest of the year and the long term development of Cranswick.
Third quarter interim management statement Cranswick, the UK food producer, today provides an update on trading for the period from 1 October 2011 to 29 January 2012. Current trading The Company benefited from a strong sales performance in the three months to 31 December 2011. Sales for the quarter increased by 10 per cent on the same period last year, building on the momentum established in the first half. Sales growth in the quarter of bacon and fresh pork products was particularly strong and there were positive contributions from all other categories. Export sales remained buoyant and sales of pastry products continued to show pleasing progress. As previously reported, pig meat products continue to gain an increased share of the UK retail protein market. Recent market data highlighted a further acceleration in this gain over the Christmas trading period. Both the versatility and the low relative price of pork to other proteins are key to this positive trend. The growing popularity of pork products continues to be a contributory factor in the increase in sales at Cranswick. There was some recovery in operating margin in the third quarter from that reported in the first half, although for the year to date it remains below that achieved in the comparable period last year.
http://www.investegate.co.uk/Article.aspx?id=201201300700153506W
Pork product specialist Cranswick saw its margins take a hit during the first six months of its financial year, ended on the past 30th of September, as the prices of pigs rose versus last year. Aggravating that was the tough operating environment, which tied the company´s hands behind its back as regards raising prices to defend margins. However, since then the price of pigs has fallen, to approximately 145p a kilo. In January, the price was 135p. Furthermore, pork meat meat is cheaper and it remains a healthy alternative to red meat, which could benefit the company during these times of austerity, a trend the company´s chairman has already confirmed. Another factor to be taken into account is that the firm renegotiated its debt in March, resulting in a 35% reduction in financing costs during the half year. Thus, “the second half of the year looks more promising, with cost inflation no longer a major issue and "robust" revenues,” writes the Sunday Telegraph´s Questor team, which rates the shares at Buy.
Numis upgrades Cranswick from hold to add, target price unchanged at 300p.
Investec reiterates buy rating and 730p target.
Financial position Net borrowings were lower than at the previous quarter end and in line with the 31 March 2011 level. The Group is in a sound financial position, with committed, unsecured facilities of £100 million which provide generous headroom going forward. Shortly before the period end the Company started a limited programme to repurchase 60,000 ordinary shares, to be held in treasury, to satisfy outstanding share option awards. Outlook With experienced management at all levels of the Group, a strong range of products, a well invested asset base and a robust financial position, the Board remains confident in the continued long term success and development of the business.
First half performance The market was updated in July with details of the first quarter's trading and as a consequence profit expectations for the current year were rebased. Trading since then has been as anticipated and includes the benefit of increased sales, both in the UK and overseas markets. Pig meat products continue to gain an increased share of the UK retail protein market, as evidenced by recent market data. In fact, there has been an acceleration in this gain in recent months. Both the versatility and the low relative price of pork to other proteins are key to this positive trend. The growing popularity of pork products has been a contributory factor in the increase in sales at Cranswick. Underlying sales volume growth in the first quarter was 3 per cent and in the second quarter was 7 per cent. The average volume growth across the six months was 5 per cent. Export sales grew strongly, with growth particularly strong in Far Eastern markets. Initial inroads were also made into the US market following the Hull fresh pork facility receiving USDA accreditation in April 2011. Underlying turnover in the six months to 30 September 2011 was 6 per cent ahead of the same period last year, reflecting an increase in the rate of growth during the second quarter. Total sales for the six months were 3 per cent higher after taking into account business transferred to Farmers Boy Deeside in July 2010. Following the recent substantial capital expenditure programme at the Group's primary processing plant in Hull it has been encouraging to see record production volumes achieved by this part of the business in recent weeks. Other notable features during the first half have been the growth in sales of pastry products, the development of the customer profile for the range of continental food products, further increases in sausage, ham and bacon volumes compared to a year ago and the achievement of sandwich listings with two major grocery retailers. During the period, the extension of the Group's air dried bacon facility at Sherburn-in-Elmet, near Leeds, was fully commissioned. This project was the final phase of a significant capital investment programme which has delivered a substantial uplift in capacity across the Group's fresh pork, sausage and bacon operations, together with increased operational efficiencies.
http://www.investegate.co.uk/Article.aspx?id=201110060700126446P
Brewin Dolphin downgrades Cranswick from add to hold, target price cut from 860p to 700p.
Shares in pork products group Cranswick had been falling of late, with investors concerned about the market backdrop and inflation. However, the numbers showed that these fears were overdone. Pig prices are likely to continue to rise into 2012 as feed costs rise, but the company has invested a substantial amount in its facilities in recent years and continues to be well positioned to deliver growth longer term. The shares are trading on a March 2011 earnings multiple of 10.7 times, falling to 9.8 in 2012. Buy, says the Telegraph.
Cranswick brings home the bacon Date: Monday 16 May 2011 LONDON (ShareCast) - Pork sausages maker Cranswick enjoyed a record year of sales and profitability, despite sales growth petering out in the first quarter of 2011. Underlying sales in the year to to 31/3/11 were up 4% from the previous year at £758m, on volumes that were 6% higher. Sales in the group's final quarter, however, were flat, year on year. Bacon sales rose by 17% while sausage sales were up 7% year on year. Pre-tax profit rose 8% to £47.1m from £43.8m the year before, while earnings per share climbed 7% to 74.5p from 69.7p. Net debt during the course of the reporting period came down by £6.5m to £48.3m. The company has appointed Adam Crouch, currently manager director of the group's Fresh Pork division, as chief operating officer. “Record levels of sales and profitability have been achieved and substantial investment has been made in the asset base to improve efficiency and to provide the capacity for continued growth. That said, the difficulties facing the UK consumer, along with rising raw material prices and the dynamics of the competitive market in which the company operates suggests that the year to 31 March 2012 may be more demanding than usual,” said chairman, Martin Davey. “However, the board anticipates that with the company's well invested asset base, strong range of products, experienced management team and robust financial position it is well positioned to continue the successful long-term development of the company,” Davey added. A final dividend of 18.7p has been recommended, a 10% increase on the previous year. The full year dividend, at 27.5p, is also 10% up on the previous year's payment.
Cranswick Chairman Martin Davey said: "This has been a very positive year for Cranswick. Record levels of sales and profitability have been achieved and substantial investment has been made in the asset base to improve efficiency and to provide the capacity for continued growth. "The borrowings of the business are conservatively structured and the Company has recently put in place a new four year bank facility which provides appropriate headroom going forward. Interest costs were covered 30 times compared to 21 times a year ago and at the year-end net debt was lower at £48.3 million. "Today it is being announced that Adam Couch has been appointed Chief Operating Officer. He was appointed to the Board in 2003 and is currently managing director of the Fresh Pork activity. "The Board anticipates that with the Company's well invested asset base, strong range of products, experienced management team and robust financial position it is well positioned to continue the long-term development of the Company." Chief Executive Bernard Hoggarth commented: "The major capital project at the Preston site (near Hull) has been completed. As part of the plant's on-going development United States Department of Agriculture (USDA) accreditation has been achieved and will allow the export of specific products to the USA."
Highlights: · Underlying sales ahead by 4 per cent at £758m on volumes 6 per cent higher · Reported revenues up 2 per cent to £758m (2010: £740m) · Pre-tax profit rose 8 per cent to £47.1m (2010: £43.8m) · Earnings per share up 7 per cent at 74.5p (2010: 69.7p) · Recommended final dividend of 18.7p - up 10 per cent · Interest cover 30 times (2010: 21 times) · Net debt reduced by £6.4m to £48.3m
Cranswick's (CWK) trading performance for the full-year will be broadly in line with its expectations, the Yorkshire-based pork supplier announced as it warned of a more demanding than usual year ahead. The group said underlying, like-for-like sales for the year to 31st March 2011 increased by 4%, while volumes were ahead by 6% on the same basis. Looking ahead, it added that it was "well positioned" to continue its long-term development. Shares in Cranswick dropped 41p to 790p.
Outlook The difficulties facing the UK consumer and the dynamics of the competitive UK market in which the Company operates suggests the year to 31 March 2012 may be more demanding than usual. However, the Board anticipates that with the Company's well invested asset base, strong range of products, experienced management team and robust financial position, it is well positioned to continue the long-term development of the Company.
http://www.investegate.co.uk/Article.aspx?id=201104040700061909E
Cranswick sees FY broadly in line with views Date: Monday 04 Apr 2011 LONDON (ShareCast) - East Yorkshire-based pork supplier Cranswick said results for the year to 31 March 2011 will be broadly in line with expectations. Underlying like-for-like sales for the year to 31 March 2011 increased by 4% while volumes during the period gained 6% on the same basis. Underlying sales in the fourth quarter were in line with those of the previous year. Operating margin was in line with management's expectations. However the company, which supplies fresh pork and gourmet sausages to Britain's food retailing and manufacturing sectors warned, "the difficulties facing the UK consumer and the dynamics of the competitive UK market in which the company operates suggests the year to 31 March 2012 may be more demanding than usual." Nevertheless the company said it remains "well positioned to continue the long-term development of the company. Cash generation from operating activities remained strong through the final quarter, the group said, while year-end net debt is lower than a year ago. Cranswick said it has put in place a new four year bank facility, on improved terms.
Sausage maker Cranswick (CWK) is confident in the "successful long term development of the business" after the positive trading performance seen in the first half of the year continued into the three months ended 31st December 2010. The company said underlying like-for-like sales increased by 5% during the quarter, showing a slight increase on the rate of growth seen in the first half of the year, while total sales were in line with those of the same period last year. Volumes were ahead by 10% on the first half of the year.
What happened Friday?
You see today's prices; believe me, this company has much further to go . . it's in food and food is a necessity. Trust me, I am THE TOASTER